October 29, 2014
By Mark Terry, BioSpace.com Breaking News Staff
After a week of rumors, the other shoe dropped and Paris-based Sanofi fired chief executive Chris Viehbacher. Viehbacher had run the company since 2008, but butted heads with the board, although he was popular with investors.
During his tenure Viehbacher oversaw the acquisition of Genzyme, with shares more than doubling in those six years. Part of his overall strategy was to cut costs and shift the company’s focus to biotechnology, vaccines, and OTC medications. He also pushed to make the company less regional and more international.
At a directors’ meeting held Wednesday October 29, Sanofi’s Board of Directors unanimously voted to oust Viehbacher. In response, he resigned his position. In a press release the company indicated it would “pursue its development with a management aligning the teams, harnessing talents and focusing on execution with a close and confident cooperation with the Board.”
Serge Weinberg will step up to act as CEO on an interim basis while remaining as chair. Weinberg was formerly the head of Gucci parent company PPR.
Viehbacher was the first non-French CEO of Sanofi. Several months ago he moved to Boston for family reasons, which drew raised eyebrows among the French Board of Directors. It was estimated that he only spent a third of his time in France, with the rest in the U.S. or traveling internationally.
Additional factors involved in the firing were Viehbacher’s plan to sell the company’s portfolio of mature drugs that was worth about $7.9 billion. The portfolio included about 200 drugs including blood thinner Plavix, antibiotic Pyostacine and Dapekine, an epilepsy medication. Due to patent expirations, decreased drug prices and European healthcare budget cuts, the portfolio, which currently brings in about 2.1 billion euros annually was expected to fall by 40 percent over the next decade.
Viehbacher’s staffing cuts also made him unpopular with French unions and with France’s former Minister of Industrial Renewal, Arnaud Montebourg. There are rumors that Montebourg will run for president of France in 2017.
In response to rumors of his possible firing, Viehbacher wrote a letter to the board, which was published yesterday in the French newspaper Les Echos. In it, Viehbacher cited his successes and said, “The inevitable media coverage and change of leadership risks organizational distraction at a critical juncture in the Group’s development. This would not be in the interests of shareholders.”
In the short term, at least, Viehbacher was correct. Upon news of his dismissal Sanofi shares fell 3.7 percent to about 71.85 euros.
